London Underground (LU) has announced that it plans to terminate a 30-year contract with Powerlink for the operation and maintenance of its high-voltage electrical network.
LU will end its contract with Powerlink, a consortium made up of UK Power Networks, Balfour Beatty and ABB, next year by envoking a half-way break clause which was agreed when the company signed the contract in 1998.
LU has said the move will have no impact on the day to day operation of the Underground.
Although the contract has been performing well, the move to restructure the PFI arrangement will give us increased operational flexibility, and mean we can invest the savings made in further transport improvements for our customers.
Sarah Atkins, LU commercial director, said: “We’ve taken a good hard look at every aspect of how we operate the railway and found that we can make significant savings by terminating this arrangement early, avoiding expensive financing costs that would have come with continuing the contract to its end.
“Although the contract has been performing well, the move to restructure the PFI arrangement will give us increased operational flexibility, and mean we can invest the savings made in further transport improvements for our customers.”
